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Facebook doesn't have to allow nicknames on its platform and can keep its real name policy in Germany, the Administrative Court of Appeals of the State of Schleswig-Holstein said Tuesday.

The appellate court Monday confirmed two earlier rulings by the lower administrative court that reached the same decision in February, said Susanne Rublack, spokeswoman for the appellate court.

The Office of the Data Protection Commissioner (ULD) for Schleswig-Holstein last year ordered Facebook to start allowing the use of pseudonyms. According to the ULD, Facebook violates the German Telemedia Act that gives users the right to use nicknames online.

Facebook began preliminary proceedings against the ULD's attempt to force the social network to change its policy. The administrative court, however, ruled in February that the ULD wrongly based its orders against Facebook U.S. and Facebook Ireland on German law.

Because Facebook's German subsidiary doesn't process any personal information and acts exclusively as a marketing and sales office for the region Irish law should apply in this case because Facebook's European headquarters are located in Ireland, the court ruled at the time.

The appellate court reached the same conclusion Monday, Rublack said. The court found that the right to use pseudonyms online is exclusively found in German law and probably not in Irish law, she added. "At least, the Data Protection Authority has not been able to prove that Irish data protection law also provides that you have to accept users who don't reveal their full name," she said.

The decision cannot be appealed again and is final, Rublack said.

The ULD now has two options. It can either retract its demands and than the case will be over or it can decide not to retract the demands allowing Facebook to challenge it in a full-fledged lawsuit, Rublack said.

The ULD will probably decide to retract its demands, said Sven Polenz, ULD's head of data protection for companies. But the organization is not entirely sure about that yet. The matter has to be discussed with Thilo Weichert, privacy commissioner and head of the ULD who is out of the office Tuesday, Polenz said. A decision will probably be made on Wednesday, he said.

Facebook is pleased the appellate court recognized that the company is "properly regulated" by the Irish Data Protection Commission for compliance with European data protection law, which also covers users in Germany, a Facebook spokeswoman said in an emailed statement.

Facebook felt that the demands from the ULD were not in the interests of the vast majority of its users, which are best served by people using their real names, she said. "We hope that the ULD will now drop this unnecessary action," she said.

Loek is Amsterdam Correspondent and covers online privacy, intellectual property, open-source and online payment issues for the IDG News Service. Follow him on Twitter at @loekessers or email tips and comments to loek_essers@idg.com